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Coronavirus Fears Driving Cloud Service Demand: 4 Winners
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A lot of things have changed in 2020. The coronavirus pandemic has shown us how technology can become an intrinsic part of our routine. From shopping to ordering food to working and learning, everything can now be done sitting at home, thanks to technology. This has seen the cloud business benefitting the most, with companies shifting data and information to technological and digital platforms to safely remain afloat.
With infections once again on the rise in the United States and a new COVID-19 strain been detected in the UK, fears have once again escalated and it is likely that people will prefer working, learning and shopping from home. This has seen a number of big players focus and invest more in the cloud business in a bid to grab a bigger share of the market.
Companies Shifting Focus to Cloud Business
An increasing number of companies have been shifting to cloud-based IT services in the United States following the COVID-19 outbreak. This has seen enterprises relying on service providers to move their workloads to high-tech services providers, according to a new report from Information Services Group.
Per the latest ISG Index, the global annual contract value for the cloud-based service market that includes IaaS and SaaS, jumped around 15% to reach $24.4 billion in the first nine months of 2020. The growth was driven by IaaS, which gained 20% to reach $17.8 billion. The report further mentions that U.S. companies are increasingly shifting focus toward data analytics and machine learning, as their remote working and learning culture are driving a huge wave of data discovery.
Cloud Business Poised to Grow
Cloud storage enhances business operations by leveraging mobile workforce with easy accumulation, archive, access, and data recovery facilities. Additionally, cloud enables storage scalability with minimal cost compared to on-premise data centers, which, in turn, boosts its adoption among small and medium enterprises across the globe.
Cloud business is working miracles for many companies as large corporations accelerate their digital shift due to the coronavirus crisis. Tech companies, which have been a savior during the pandemic, are expanding their cloud business.
Although two vaccines have already been approved and are being rolled out, fears too are escalating due to the sudden spike in new coronavirus cases. Moreover, the pandemic has already changed the working and learning culture. Many companies have extended their wok-from-home facilities till late 2021, while students are opting for remote learning.
Hence, several companies are already expecting their cloud usage to exceed plans due to the impacts of the COVID-19 pandemic. Thus the new trend of remote working and learning is here to stay, which will only help drive the cloud business in the days to come.
Our Choices
Tech companies have been aggressively expanding their cloud services, given that the coronavirus pandemic is far from over. Given the situation, we have shortlisted four tech companies that are sure to benefit from soaring demand for cloud services.
Microsoft Corporation (MSFT - Free Report) is one of the largest broad-based technology providers in the world. It is also now one of the two public cloud providers that can deliver a wide variety of infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) solutions at scale.
The company’s expected earnings growth rate for next year is 9.8%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dropbox, Inc. (DBX - Free Report) offers a platform which enables users to store and share files, photos, videos, songs and spreadsheets. Dropbox, Inc. is headquartered in San Francisco, CA.
The company’s expected earnings growth rate for next year is 13.6%. The Zacks Consensus Estimate for current-year earnings has improved 14.3% over the past 60 days. Dropbox has a Zacks Rank #2.
The Trade Desk Inc. (TTD - Free Report) is a provider of technology platform for advertising. The company through self-service, cloud-based platform, ad buyers create, manage and optimize data-driven digital advertising campaigns.
The company’s expected earnings growth rate for the current year is 3.2%. The Zacks Consensus Estimate for current-year earnings has improved 52% over the past 60 days. The Trade Desk carries a Zacks Rank #2.
Zscaler, Inc. (ZS - Free Report) is one of the world’s leading providers of cloud-based security solutions. The company offers a full range of enterprise network security services including web security, Internet security, antivirus, vulnerability management, firewalls, and control over user activity in mobile, cloud computing, and Internet of Things environments
The company’s expected earnings growth rate for the current year is 54.1%. The Zacks Consensus Estimate for current-year earnings has improved 27.6% over the past 60 days. Zscaler holds a Zacks Rank #2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
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Coronavirus Fears Driving Cloud Service Demand: 4 Winners
A lot of things have changed in 2020. The coronavirus pandemic has shown us how technology can become an intrinsic part of our routine. From shopping to ordering food to working and learning, everything can now be done sitting at home, thanks to technology. This has seen the cloud business benefitting the most, with companies shifting data and information to technological and digital platforms to safely remain afloat.
With infections once again on the rise in the United States and a new COVID-19 strain been detected in the UK, fears have once again escalated and it is likely that people will prefer working, learning and shopping from home. This has seen a number of big players focus and invest more in the cloud business in a bid to grab a bigger share of the market.
Companies Shifting Focus to Cloud Business
An increasing number of companies have been shifting to cloud-based IT services in the United States following the COVID-19 outbreak. This has seen enterprises relying on service providers to move their workloads to high-tech services providers, according to a new report from Information Services Group.
Per the latest ISG Index, the global annual contract value for the cloud-based service market that includes IaaS and SaaS, jumped around 15% to reach $24.4 billion in the first nine months of 2020. The growth was driven by IaaS, which gained 20% to reach $17.8 billion. The report further mentions that U.S. companies are increasingly shifting focus toward data analytics and machine learning, as their remote working and learning culture are driving a huge wave of data discovery.
Cloud Business Poised to Grow
Cloud storage enhances business operations by leveraging mobile workforce with easy accumulation, archive, access, and data recovery facilities. Additionally, cloud enables storage scalability with minimal cost compared to on-premise data centers, which, in turn, boosts its adoption among small and medium enterprises across the globe.
Cloud business is working miracles for many companies as large corporations accelerate their digital shift due to the coronavirus crisis. Tech companies, which have been a savior during the pandemic, are expanding their cloud business.
Although two vaccines have already been approved and are being rolled out, fears too are escalating due to the sudden spike in new coronavirus cases. Moreover, the pandemic has already changed the working and learning culture. Many companies have extended their wok-from-home facilities till late 2021, while students are opting for remote learning.
Hence, several companies are already expecting their cloud usage to exceed plans due to the impacts of the COVID-19 pandemic. Thus the new trend of remote working and learning is here to stay, which will only help drive the cloud business in the days to come.
Our Choices
Tech companies have been aggressively expanding their cloud services, given that the coronavirus pandemic is far from over. Given the situation, we have shortlisted four tech companies that are sure to benefit from soaring demand for cloud services.
Microsoft Corporation (MSFT - Free Report) is one of the largest broad-based technology providers in the world. It is also now one of the two public cloud providers that can deliver a wide variety of infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) solutions at scale.
The company’s expected earnings growth rate for next year is 9.8%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dropbox, Inc. (DBX - Free Report) offers a platform which enables users to store and share files, photos, videos, songs and spreadsheets. Dropbox, Inc. is headquartered in San Francisco, CA.
The company’s expected earnings growth rate for next year is 13.6%. The Zacks Consensus Estimate for current-year earnings has improved 14.3% over the past 60 days. Dropbox has a Zacks Rank #2.
The Trade Desk Inc. (TTD - Free Report) is a provider of technology platform for advertising. The company through self-service, cloud-based platform, ad buyers create, manage and optimize data-driven digital advertising campaigns.
The company’s expected earnings growth rate for the current year is 3.2%. The Zacks Consensus Estimate for current-year earnings has improved 52% over the past 60 days. The Trade Desk carries a Zacks Rank #2.
Zscaler, Inc. (ZS - Free Report) is one of the world’s leading providers of cloud-based security solutions. The company offers a full range of enterprise network security services including web security, Internet security, antivirus, vulnerability management, firewalls, and control over user activity in mobile, cloud computing, and Internet of Things environments
The company’s expected earnings growth rate for the current year is 54.1%. The Zacks Consensus Estimate for current-year earnings has improved 27.6% over the past 60 days. Zscaler holds a Zacks Rank #2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>